Burroughs v. David

"Woodward, J. There was a subsequent answer filed, setting up a withdrawal of the above named reference, arbitration, and award, and a reference to five persons, members of the church to which the parties, or two of them, at least, belonged. This answer sets up and shows the award of those arbitrators, but a demurrer thereto was sustained, and the whole was set aside ; and the parties, in their further proceedings in the court, fell back upon the first award. In relation to the power of a court over, an award, we apprehend there is a material difference between the cases where the reference is under a statute provision, or is made a rule of court, in either of the methods by which it may be made so, and those where it is solely by an agreement of the parties, as at common law. In the latter case, "the arbitrators constitute a tribunal, created by the parties themselves ; they aré. judges, appointed by them, instead of those existing under the law of the land. The courts have but little authority over them, and but little power in relation to their doings. Especially is this true of the courts of law, nearly all the authority which does exist, in regard to them, residing in courts of equity. Efner v. Shaw, 2 Wend., 567; Rylea v. Ramsay, 2 Ib., 602; Elmendorf v. Harris, 5 Ib., 516; Waite v. Barry, 12 Ib., 377; Emmett v. Hoyt, 17 Ib., 410; Newland, v. Douglass, 2 Johns., 62; Barlow v. Todd, 3 Ib, 367; Same case, 2 Johns. Ch., 551; Cranston v. Kenny, 9 Johns., 212; Underhill v. Van Cortlandt, 2 Johns. Ch., 339; Caldwell on Arb., 364, 473; Ib., 7, note; 1 Bac. Ab. Title, Arb. and Award, K., 316. Thus, in the above, and other cases, it has been held that evidence of mistakes in an award, cannot be giv. en in a court of law; that a party cannot, in an action on an arbitration bond, avail himself of a promise to correct the mistakes of arbitrators ; that no evidence can be given impeaching the conduct of the arbitrators, unless, possibly, [160] for corruption, gross partiality, or want of authority, and then, perhaps only in equity; that nothing detiors the award, can be shown ; that it is not examinable in a court of law, unless for the causes above named; and that an award is like a judgment, which cannot be contradicted, and this even for a refusal to hear proper testimony, or for hearing ex parte. The leading thought thus arrived at is, that arbitrators are a tribunal created by the parties, and by them invested with authority; that this is not derived from the State, or the law; and that there is nothing which connects them with the tribunals of the land, or gives the latter authority over them, and consequently, that the courts have no power in relation to them, except where a wrong has been done, which partakes of the character of wilfulness — as in fraud, or corruption. And, even where the courts have interposed, it has generally been by those which proceed upon the principles of equity ; for the relief sought, is usually obtained only through the medium of these principles. But we do not propose to pursue this train of thought. It was intended only to suggest the idea, that when a reference to arbitration is made, under a statute, this brings it more into connectioji with the courts of the land, and affords ground for the latter to exercise an authority which, otherwise, might be wanting. This distinction may not press strongly in the present case, for we regard the defenses set up as wanting in force, in either point of view. The matters set up in the second count of the answer, which is demurred to, does not constitute a defense to this action on the arbitration bond. Ve will not say but that it would, if the defendant had pleaded matter which supported the averment, that the award was obtained by fraudulent concealments and representations; but, after making that allegation, he says that this fraud consisted in not making a true exhibit of all debts by them created — of all the amounts received by them— and generally, in not making á full statement of the business of the firm, but that they [161] stated a less amount than was true. To make this'a good and sufficient plea, it should have shown the particulars wherein they failed, or which they omitted ; for an issue on this plea, as pleaded, would load to a re-examination of the entire transactions, so far as they related to debts contracted, and sums received; and besides this, would have thrown the proof upon the wrong party. But aside from this view, it was a part of the terms of submission, that the parties should make a disclosure upon all these subjects, under oath; and thus it was mutually ¿greed that their testimony should be received. It would seem,- from the nature of the case, that this cannot be made a defense, in an action on the bond. The testimony was to be taken. The parties took their chánce with each other. And further, it cannot be averred, that the plaintiff’s testimony was received fully and unqualifiedly, or that the arbitrators may have credited the one side more than the other. It was for them to judge of, and to determine. How can the one side defend on the bond, by saying that the other belied the confidence placed in him ? No one pretends that he can defend against a judgment recovered, by pleading that his opponent, whom he calls to testify, did not testify truly. Another reason exists against allowing this as a plea. And that is, that it goes too far. The only legitimate end that could be arrived at, in such a case, would be to correct the mistake, or to recommit the matter, to the end that the arbitrators might do this. The error would be partial only — would exist’ only as to some particulars, and not to the whole — and therefore the entire finding should not be overthrown ; but this plea allowed as a defense, would nullity the whole arbitration. And again, it would lead to that which would amount to an appeal from the award. It would, in effect, open up a new trial; and there would be no conclusiveness in an award, when the parties testify. "We conclude, therefore, that this defense cannot prevail in a court of law* in an action brought on the arbitration [162] bond, and that the demurrer should have been sustained,, to-this portion of the answer. - The third count in the answer, and to which the demurrer applies, is that the plaintiffs so managed the business,, that they swindled and greatly defrauded the defendant... The demurrer opposes the same objection, namely, that, this is not a subject of defense, and cannot be inquired-into, and also, that it is res adjudicata,. The same authorities and reasoning, nearly, apply to this, which were^ applied to the previous defense. .But farther, this is the very essence of the matter submitted to arbitration.- The article of submission states, that David claimed damages for losses sustained by reason of bad management of .the" business by,; the plaintiffs. This supposed mismanagement was the main substance of the matter to be arbitrated, and to plead it as a defense in this action, is only pleading the samé thing which he referred to the arbitrators. But he says it w-as not passed upon. Notwithstanding this averment,, it must be assumed that it was passed' upon; for if there was a hearing and an awrard, it must! have been. It is like matter, a finding upon which is nef cessarily involved in the verdict. But further, the defendant does not allege a reason why they were not passed' upon. He does not aver a refusal to hear, nor any delinquency on the part of the arbitrators, in relation to this; nor even that he offered evidence upon it; and urges nothing to show improper conduct, or an illegal refusal. See cases cited by counsel. The cases heretofore decided by this court, reported in 2 G. Greene, 26; 2 Iowa, 44; 3 Iowa, 66, and 4 lb., 420, were under- statutes relative to arbitrations, and the references were made rules of court. . The matters set up in the answer, are insufficient, and the demurrer thereto should have been sustained. The judgment of the district court in favor of the defendant,; is, therefore, reversed, and a wTrit "of procedendo is awarded.